By Will McSheehy and Ronnie Harui April 22 (Bloomberg) -- Asian stocks fell and the yen strengthened on concern U.S. plans to increase oversight of financial companies and force separation of derivatives trading from other businesses may crimp earnings. The MSCI Asia Pacific Index declined 0.7 percent to 126.29 as of 4:15 p.m. in Tokyo. The yen advanced against 11 of 16 major counterparts, gaining to 124.45 per euro from 124.77 in New York yesterday. Standard & Poor’s 500 futures lost 0.2 percent. The Stoxx Europe 600 was little changed in London. President Barack Obama will say today that new financial- industry regulations are needed to protect the U.S. economy from “risky decisions” on Wall Street, according to spokesman Robert Gibbs. The speech comes after a Senate panel approved draft legislation yesterday that would force lenders to separate swaps trading from commercial bank operations. The Securities and Exchange Commission said last week that it’s suing Goldman Sachs Group Inc. for fraud linked to derivatives transactions. “The markets are wary over what Obama may say about new financial-industry regulations” said Yuji Saito, director of the foreign-exchange department at Credit Agricole CIB in Tokyo. “The mood is leaning toward risk aversion.” Japan’s Nikkei 225 Stock Average sank 1.2 percent, following yesterday’s 1.7 percent advance, and Australia’s S&P/ASX 200 Index lost 1.1 percent. An index of financial companies on the MSCI Asia Pacific Index sank 0.9 percent. Mitsubishi UFJ Financial Group Inc., Japan’s biggest bank, lost 1.4 percent to 507 yen. In Sydney, Westpac Banking Corp. dropped 2.1 percent to A$27.62. Property Loans China’s Shanghai Composite Index fell 0.6 percent, led by banks and developers, on concern government measures to curb government property loans will damp earnings growth. Developer China Vanke Co. dropped 1.5 percent. “Investors are worried about a worst-case scenario for banks and property companies on the government’s crackdown,” said Wei Wei, an analyst at West China Securities Co. in Shanghai. Some banks in Beijing are requiring down payments equal to 60 percent of a property’s value for loans to buy third homes, the 21st Century Business Herald reported today, citing an Agricultural Bank of China official it didn’t identify. The cost of protecting Asia-Pacific bonds from non-payment increased, according to traders of credit-default swaps. Bond Risk The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan climbed 3 basis points to 96.5 basis points in Singapore, Barclays Plc prices show. The Markit iTraxx Japan index added 1.5 basis points to 92 in Tokyo, the highest level since April 9, according to Morgan Stanley and CMA DataVision. Crude oil was little changed at $83.65 a barrell in New York after a U.S. Energy Department report showed inventories climbed by 1.89 million barrels. Analysts polled in a Bloomberg survey had forecast a 750,000-barrel drop. “We’re yet to see a substantial recovery in the U.S. oil market fundamentals,” said Toby Hassall, a commodity analyst at CWA Global Markets Pty. in Sydney. “The market reacted to the DOE numbers, which were pretty soft across the board.” Copper for three-month delivery on the London Metal Exchange rose 0.4 percent to $7,787 a metric ton. Rubber for September delivery in Tokyo tumbled 1.5 percent to 435.1 yen per kilogram. To contact the reporters on this story: Will McSheehy in Sydney at wmcsheehy@bloomberg.netRonnie Harui in Singapore at rharui@bloomberg.net;

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